Correlation Between Pacific Strategic and Era Media
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Era Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pacific Strategic and Era Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Strategic Financial and Era Media Sejahtera, you can compare the effects of market volatilities on Pacific Strategic and Era Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pacific Strategic with a short position of Era Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Era Media.
Diversification Opportunities for Pacific Strategic and Era Media
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pacific and Era is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Era Media Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Era Media Sejahtera and Pacific Strategic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pacific Strategic Financial are associated (or correlated) with Era Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Era Media Sejahtera has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Era Media go up and down completely randomly.
Pair Corralation between Pacific Strategic and Era Media
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to under-perform the Era Media. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Strategic Financial is 3.8 times less risky than Era Media. The stock trades about -0.01 of its potential returns per unit of risk. The Era Media Sejahtera is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,100 in Era Media Sejahtera on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Era Media Sejahtera or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Era Media Sejahtera
Performance |
| Timeline |
| Pacific Strategic |
| Era Media Sejahtera |
Pacific Strategic and Era Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Era Media
The main advantage of trading using opposite Pacific Strategic and Era Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Era Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Era Media will offset losses from the drop in Era Media's long position.| Pacific Strategic vs. Asuransi Harta Aman | Pacific Strategic vs. Asuransi Bintang Tbk | Pacific Strategic vs. Mnc Kapital Indonesia | Pacific Strategic vs. Arthavest Tbk |
| Era Media vs. Bank Central Asia | Era Media vs. Bank Rakyat Indonesia | Era Media vs. Bayan Resources Tbk | Era Media vs. Bank Mandiri Persero |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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